On March 2nd, 2025, Donald Trump posted on Truth Social announcing his intention to create a Strategic Crypto Reserve for the United States.
A follow-up post clarified that the reserve portfolio would include Bitcoin and Ethereum. This announcement immediately sent Bitcoin’s price soaring from $78,000 to $94,000, especially after the 20% tariff drawdown.
Source: Coingecko.com Bitcoin prices
But what exactly is a Strategic Reserve, and does crypto belong in one?
Understanding Strategic Reserves
A strategic reserve is a stockpile of critical resources a government maintains to hedge against emergencies, crises, or economic instability. Some well-known examples include:
- Strategic Petroleum Reserve (SPR): A government-controlled oil stockpile used to stabilize fuel prices or ensure energy security during geopolitical crises.
- Strategic Military Reserve: A stockpile of weapons, ammunition, and resources for national defense.
By this definition, a Strategic Crypto Reserve would imply the U.S. government is actively accumulating and holding cryptocurrencies as a national financial hedge. But is that a wise strategy?
The U.S. Government Already Owns Bitcoin
Currently, the U.S. government owns over 200,000 BTC, mostly acquired through seizures from criminal cases like Silk Road and other hacks. Some experts argue this could form the foundation of a National Crypto Reserve, especially since it doesn’t require Congressional approval—a key advantage.
Trump’s proposal isn’t entirely new. In July 2024, at the Bitcoin Conference in Nashville, he promised to establish a Strategic National Bitcoin Reserve. His pro-crypto stance was a major reason why the crypto industry overwhelmingly backed his campaign. Joe Biden’s administration, particularly SEC Chair Gary Gensler, had aggressively targeted crypto companies, causing industry leaders to shift their political support to Trump.
Crypto vertical became the largest donor base to Trump’s election campaign, funneling millions into Republican candidates nationwide. Following his victory, Trump doubled down by appointing a “Crypto and AI Czar.” And nominating a crypto-friendly SEC chair.
Is a Strategic Crypto Reserve Justified?
The big question: Is a Strategic Crypto Reserve actually “strategic”?
I argue it is not, for several reasons:
- It Uses Taxpayer Money for Speculation
- Unlike oil, a consumable resource with clear national security value, Bitcoin and Ethereum do not stabilize the economy or protect against immediate crises.
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